CGP 2.0 Updates and Renewal
Firstly, thank you @adam @Doo_StableLab @allthecolors @Michigan_Blockchain @cylon for reviewing the proposal and sharing your valuable feedback, and to everyone who participated in the discussions to renew CGP 2.0.
Summary
After successfully running CGP 2.0 for two quarters and taking into consideration its impact, we propose to renew Compound Grants Program 2.0 with a budget of $970,000 spread across 3 domains. We have received great feedback from the community, builders and domain allocators to renew CGP 2.0 and are grateful for their valuable inputs.
Background and Progress
CGP 2.0 went live in Jan, 2023 with a grants budget of $800k spread across four domains. Over the past two quarters, CGP 2.0 domain allocators approved proposals requesting $670,000 in grants and disbursed a total of $252,000 to accepted proposals from a pool of 100+ proposals. These domain allocators were elected from the community and by the community. The specific information regarding the accepted and funded proposals can be found here. Please find below CGP 2.0’s funding breakdown, relevant metrics, insights, and proposed improvements going forward.
Funding Breakdown
Metrics
- CGP 2.0 team has received exceptional feedback from the builder community. After conducting a survey to gather feedback from the proposers and grantees, CGP 2.0 received an impressive NPS score of 8.6/10 and experience score of 8.2/10. Below are some comments provided for reference.
- The CGP 2.0 grants committee has accepted proposals from a diverse pool of over 100 submissions with an acceptance rate of 40%. This acceptance rate indicates high quality of proposal submissions and proposal pipeline. Throughout the grants program, CGP 2.0 grants team has consistently maintained a remarkable average communication turnaround time (TAT) of less than 48 hours and an average funding TAT of less than 2 weeks after the milestone has been completed. Furthermore, the milestone completion rate for all funded proposal and accepted proposals stands at ~ 57% and ~27% respectively.
- Total number of proposal funded - 23
- Number of funded proposals with new interfaces for supplying/borrowing/governance interaction - 9
- Number of funded proposals supplying/borrowing on Compound - 3
*Note : These figures exclude proposals that have not yet completed their first/initial milestones. The majority of the accepted proposals are actively progressing towards accomplishing their milestones, and we will keep the community informed about the progress of proposals in each bucket such as proposals supplying/borrowing on Compound, TVL through community calls and reports.
Insights and Feedback
1.Specific domains made it easier for builders to understand the scope and structure their grants proposal
In case of CGP 2.0, we took a fundamentally different approach by ensuring that each focus area (domain) is communicated clearly. We streamlined the program to four specific domains, providing builders with a more focused and structured framework.
2.Knowing the allocator’s name for their domain helped builders with a significantly faster query resolution and TAT
The public availability and accessibility of the domain allocator played a crucial role in maintaining a very low turnaround time (TAT) for CGP 2.0. Builders who applied to a specific domain could directly connect with the respective domain allocator, enabling them to ask additional questions/seek clarifications.
3.A transparent and objective review process significantly benefitted builders, enabling them to incorporate actionable feedback into their resubmissions
In addition to maintaining a communication TAT of less than 48 hours, domain allocators assessed proposals using a domain-specific rubric in a transparent manner. This objective feedback provided builders with a clear understanding of the areas that needed improvement, allowing them to revise and resubmit their proposals based on actionable feedback.
Proposer’s Experience and Comments
- Governance Voting Participation and Decentralization Tracker by Signal Corps
- AlcancĂa - Be your own bank for Latin Americans by Juan Diego Oliva Heinsen
- 1Delta DAO - The decentralized margin broker by Achim and Kevin
- A Flexible Voting Money Market on Compound V3 by Ben DiFrancesco
- Wido - Collateral Swap Extension by Roman
TAT
CGP 2.0 Demo Day
Challenges and Expected Improvements
While CGP 2.0 team has received great feedback from the builder community and Compound, there is still room for further improvement.
1.Ensuring a consistent TAT for all proposals - Although the average communication TAT for all proposals was below 48 hours and the average funding TAT was less than 2 weeks, there were instances where proposers experienced delays in response or were unaware of the reasons behind the delay. Similarly, some grantees encountered delays in receiving funding. While these delays can be attributed to factors such as product bugs, going forward the CGP team will ensure a consistent communication and funding TAT to all the teams and ensure that these delays are communicated proactively.
2. Addressing funding amount discrepancies - CGP 2.0 will be able to honor all funding commitments to all the accepted proposals. Despite that, there were cases where proposers did not receive the exact amount initially committed due to fluctuations in the value of COMP and funding delays. To mitigate this issue, the CGP team will aim to payout the grantees as soon as the proposer hits the milestone. We further propose paying out accepted proposals in stables rather than COMP to avoid potential discrepancies caused by COMP price volatility.
3. Improving operational efficiency - Questbook is working with Synapse and Docusign to integrate their service and enable KYC and agreement signing directly from Questbook. This will significantly improve the operational efficiency and funding TAT going forward.
Proposal
Based on the impact and insights derived from CGP 2.0, we propose renewing CGP 2.0 with a budget of $970k for two quarters. The domain allocators will utilize this budget to fund proposals that align with Compound’s roadmap. After researching, gathering feedback from domain allocators, active community members, and builders, we propose supporting the following domains:
| Domain | Domain Allocator | Proposed Budget |
|---|---|---|
| Dapps and New Protocol Ideas | allthecolours | $450,000 |
| Multi - Chain/Cross chain Strategy, Dev Tooling | Doo from Stable Labs | $200,000 |
| Security Tooling | Michael from Openzepplin | $150,000 |
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Given that Dapps and New Protocol Ideas domain received more than twice the number of proposals compared to all the other domains combined, we propose merging Multi-chain and Cross-chain Strategy domain with the Dev Tooling domain.
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Additionally, we propose increasing the allocated grants budget for Dapps and New Protocol Ideas domain to $450,000 and reducing the grants budget of the Security Tooling domain to $150,000 taking into consideration the number of proposals and allocated grant amounts for both domains during CGP 2.0.
Specifications and Implementation
Similar to the model implemented in CGP 2.0, the renewed grants program will be run using Delegated Domain Capital Allocation Model. Each domain allocator will run their respective domain on-chain for full transparency using Questbook. The data and performance across key metrics will be visible to the community.
The disbursement of the grant will take place on-chain from a multi-sig wallet controlled by the program manager & the domain allocator. The domain allocator will approve or reject the application based on evaluation rubric. A Grants SAFE, with 3/4 multi-sig, between the program manager and 3 domain allocators will be setup. We will then have 3 SAFEs for each of the domains with a 2/2 between the program manager and the specific domain allocator. The funds for the grants program will flow from the treasury into the Grants SAFE. This SAFE will hold the funds related to operational costs, committee compensation, and the grants budget. Funds that will be disbursed to the proposers will reside in the domain-level SAFEs.
After the end of two quarters, the grants committee and the Compound community shall evaluate the performance of each domain using publicly available data and decide to change the domain, change the domain allocator or the program manager. CGP 2.0 closed reviewing proposals on June 30th. CGP 2.0 grants team will proceed with initiating payouts for the remaining milestones to the accepted proposals from the allocated budget upon approval of this proposal.
Compensation
Sourcing, reviewing, funding, marketing, tracking and nurturing proposals requires significant expertise and time commitment from the grants committee members and they should be fairly and competitively compensated for their efforts. Based on the learnings from CGP 2.0 specified above, we believe that a Program Manager is expected to dedicate approximately 25 hours per week, while the domain allocator is required to allocate an estimated 15 hours per week. However, these time commitments may vary depending on the number of proposals received for a domain and the domain allocators may exceed or work for less than 15 hours per week based on the proposal volumes. We propose keeping the hourly price the same for the Domain Allocators and the Program Manager as in the case of CGP 2.0
| Role | Per Hour Cost | Hours Dedicated Per Week | Total |
|---|---|---|---|
| Program Manager | 100 | 25 | $60,000 |
| Domain Allocator | 80 | 15 | $90,000 |
| Operations Cost, Misc. | $20,000 | ||
| Total Amount Required | $170,000 |
- Questbook will provide the grants committee its grants orchestration tool free of cost. We suggest that the grants committee continue with Synapse for KYC services and Docusign for all contractual agreements, as we have been using these services throughout CGP 2.0.
- However, for any specific asks from the grants team in order to run the process more smoothly, Questbook will charge for any additional feature requests based on the development overhead through a retrospective grant proposal from Compound at the end of two quarters.
CGP 2.0 Funding Overview
(As on 22nd July, 2023)
| Domain (A) | Amount Available (B) | Grant Amount Paid Out (C) | Grant Amount Allocated (D) | Surplus (E) |
|---|---|---|---|---|
| Dapps and protocol ideas | ~$476,000 (6,834.5595 COMP) | $160,000 | $384,000 | ~$251,000 |
| Multi - chain and Cross Chain | ~$207,000 (2,921.8384 COMP) | $50,001 | $89,003 | ~$168,000 |
| Developer Tooling | ~$96,000 (1,402.8018 COMP) | $16,000 | $90,877 | ~$22,000 |
| Compound III Security Tooling | ~$246,000 (3,465.0216 COMP) | $26,000 | $105,800 | ~166,000 |
| Estimated Allocated Operational Cost | ~($100,000) | NA | NA | NA |
| Total | $1.025M | $252,000 | $678,031 | ~$500,000 (Surplus - Operational allocated cost) |
- Considering the funding breakdown and COMP’s price on July 22, 2023, ~$520,000 will be reserved from the CGP 2.0 budget’s available funds. This allocation will be utilised to fulfill the milestone payout obligations for accepted proposals and committee compensation for the month of May, June, and July.
- The unallocated funds from every domain will be returned to the treasury from the renewal budget at the end of 2 quarters
KPIs and Expectations
Program Success
- Increase in the number of contributors, proposals, and funded projects
- Increase in milestone and proposal completion rates
- Increase in NPS score from all proposers and grantees
- Lower response turn around time to delegates’ and community’s queries
- Diversity in projects being funded across technologies, geographies, and demographics, to name a few. We encourage the community members to review the proposals across different domains during community calls regularly
- Timely publishing of comprehensive monthly grants report, outlining the status, progress, and impact of the program, ensuring transparency and accountability
Enhanced Community Involvement
- Increase in community engagement across :
- Discourse
- Discord, Telegram
- Social media (Twitter, Reddit)
- Increase in the community members’ participation to keep domain allocators and program manager accountable (measured by the number of people looking at the dashboard and participating in the program)
Brand Awareness
- Strengthened contributors’ sentiment and word of mouth towards Compound measured through frequent sentiment surveys/ polls to gauge satisfaction
- Enhanced Compound’s brand recognition and awareness within contributor circles through surveys or social media analytics, tracking mentions, reach etc.
Contribution of Funded Projects to Compound
- Number of users onboarded by the funded proposals onto their app/protocol
- TVL (if applicable) of the selected proposals
- Number of projects supplying/borrowing on Compound
- Number of new interfaces for supplying / borrowing / governance interactions
- Number of projects that have raised follow on capital after getting a grant from CGP 2.0
Domain Allocator Roles & Responsibilities
- All Domain Allocators and the Program Manager will continue to uphold their designated responsibilities as outlined in the CGP 2.0 proposal.
- Domain allocators may request an audit for the considered/accepted proposals, particularly those that involve Solidity code being deployed into production and directly impacting Compound. In order to streamline the code auditing process and avoid potential time-consuming challenges, the domain allocators will provide assistance to the considered/accepted proposals by offering feedback on code quality and design.
- Similar to CGP2.0, the Program Manager will collaborate with the Compound Labs team and the elected domain allocators to create and list out necessary RFPs in order to ensure alignment with Compound’s priorities and roadmap. For reference, a similar list of priorities and proposal writing guides for CGP 2.0 can be seen here and here
About Questbook
- Questbook (YC-W21) is a decentralized grant orchestration tool, currently being/previously used by Polygon, AAVE, Celo, Solana, TON, Aleph Zero etc.
- Considering the achievements of CGP 2.0, as well as the time commitment and operational expertise necessary for running an effective grants program, Questbook will continue in the role of the Program Manager. Ruchil from Questbook will assume the responsibilities of the Program Manager in place of @harsha due to bandwidth constraints. Ruchil was the program manager for Polygon facilitating the disbursal of ~ $1M in grants. He works with Solana foundation and ecosystems within Solana on a daily basis to help them design their grants program. He has received a grant of $250K from the Solana foundation for the same. He also worked closely with CGP 2.0 Program Manager and Grants team.
Next Steps
We welcome the community members to participate in the temperature check and share their feedback and comments below.
- I am in favour of this proposal. Any unallocated funds from CGP 2.0 should be returned to the treasury before renewal.
- I am not in favour of this proposal and I will post a reply that shares my thoughts
